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European creditors should either write down a massive amount of Athens’ debt or give Greece a 30-year grace period if they want it to recover and repay, according to a Reuters’ report citing International Monetary Fund (IMF) officials and a secret study.

Taking into account Greece’s growing financial needs, its debt situation is “unsustainable,” according to the latest IMF projections contained in a confidential report obtained by Reuters. The new data, sent by the IMF to EU governments late on Monday after a new Greek bailout plan was agreed upon in principle, states that the 86-billion-euro program will not save Greece from financial collapse.

The updated debt sustainability analysis, which is said to have been released by the fund now that several media outlets have leaked the data, calls for a considerable portion of the Greek debt to be written off.

“The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM [European Stability Mechanism bailout fund],” the IMF paper says.

According to the leaked study, Greece’s debt will peak at nearly 200 percent of economic output in the next two years, standing at 170 percent of GDP even by 2022. Previously published estimates had put the figures at 177 percent and 142 percent respectively.

The IMF now estimates that Athens’ gross financing needs will rise above the “safe” 15 percent of GDP threshold and continue rising in the long term. Moreover, even those projections “remain subject to considerable downside risk,” the study said

A 30-year grace period on servicing the Greek European debt, including new loans, would have to be provided by the European creditors, as well as a significant maturity extension, the IMF believes. Otherwise, the creditors would have to make annual fiscal transfers to the Greek budget or accept “deep upfront haircuts” on their loans, the report says.

Greece is in need of much greater debt relief than European governments are willing to acknowledge, and this measure is needed to let the Greek economy recover, a senior IMF official told Reuters late on Tuesday.

“I don’t think this is a gimmick or kicking the can down the road… This is a dramatic measure to take the entire European stock [of debt] and reprofile it,” for Greece to have a chance of “getting some growth back,” the official said on condition of anonymity.

For the IMF to remain involved in financial aid for Greece, its debt must be deemed “sustainable” by the fund – something which the latest study does not believe possible.

“Borrowing at anything but AAA rates in the near term will bring about an unsustainable debt dynamic for the next several decades,” the paper says, challenging the assumption voiced by some European officials that in 2018 Greece will already be able to meet some of its financing needs by going to the markets.

The publication of the IMF report comes on the heels of other disclosures, such as German Finance Minister Wolfgang Schaeuble revealing that some members of the government in Berlin would have preferred that Greece take a “time-out” from the eurozone rather than give it another bailout.

Meanwhile, the new debt sustainability figures for Greece had reportedly been given to European finance ministers on Saturday – well before the Monday deal was concluded.

The timing of the leak coincides with Greek Prime Minister Alexis Tsipras’s attempt to convince his parliament that accepting the deal is the only option if Greece is to remain in the euro and avoid economic collapse.

Tsipras gave a live TV interview defending the deal ahead of Wednesday’s parliamentary session that is to decide the issue. The outcome of the vote is far from certain, with many of the Syriza leader’s fellow party members unhappy with the new bailout plan.

While revealing he “does not believe in” the bailout plan, Tsipras argued that the deal was the only way for Greece to stay in the EU – something that he said was a “one way street” option imposed on the Greeks. However, he claimed that he had still managed to win certain concessions such as avoiding wage and pension cuts and securing ‘fresh money’ from European states.

Ukraine’s Prime Minister Arseny Yatsenyuk hopes to sell the country’s state-owned companies to the US. American investors will get the assets “on the most transparent conditions” if they decide to invest, he said.

The statement comes ahead of a Ukrainian-American investment conference in Washington on July 13.

“We want to start the privatization process… We want to see American owners on the territory of Ukraine, they will bring not only investment, but also new standards, new ways of managing the companies, and a new investment culture,” Yatsenyuk was cited as saying during his meeting with the representatives of Ukraine’s diaspora in Washington, UNIAN reported on Tuesday. Yatsenyuk and Ukraine’s Finance Minister Natalia Jaresko are in the US capital on a working visit which will last until June 10.

The massive privatization process of Ukraine’s state-run assets is planned for the second quarter of 2015. In April, the Ukrainian government decided to hold a number of investment conferences in Berlin, Paris and Washington to attract investors and to spread the privatization idea. The Prime Minister then said they expect to see American and European entrepreneurs in agriculture, energy, especially in the modernization of the Ukrainian gas transportation system and the mining industry, as well as in other vital sectors of the economy.

Ukraine is facing a deep economic crisis with the country on the verge of a default. Earlier this month, the IMF’s mission in Ukraine said the country’s GDP is expected to shrink 9 percent in 2015, with annual inflation to hit 46 percent. Ukraine’s total debt is estimated around $50 billion, $30 billion of which is external debt and $17 billion internal debt. Public sector debt rose to 71 percent of Ukraine’s gross domestic product, and is due to rise to 94 percent of GDP in 2015, according to the National Bank of Ukraine.

Last year, Ukraine’s President Petro Poroshenko invited foreign citizens to become key ministers in the new government of Ukraine, claiming that he views the foreigners as some kind of “anti-crisis management needed due to the difficult situation in economy”. The natives of the US, Georgia and Lithuania – Natalie Jaresko, Aleksandr Kvitashvili, and Aivaras Abromavicius were approved by the parliament to head up the Ministry of Finance, Ministry of Health and Ministry of Economic Development, respectively. All of them have been granted Ukraine citizenship after a decree amending the law to allow foreigners into the government.

Greece has been invited by Russia to become the sixth member of the BRICS New Development Bank (NDB). The $100 billion NDB is expected to compete with Western dominance and become one of the key lending institutions.

The invitation was made by Russian Deputy Finance Minister Sergey Storchak on Monday during a phone conversation with Greek Prime Minister Alexis Tsipras, according to a statement on Greece’s Syriza party website. Tsipras thanked Storchak, who’s currently a representative of the BRICS Bank for the invitation, and said Greece was interested in the offer.

“The Prime Minister thanked Storchak and said he was pleasantly surprised by the invitation for Greece to be the sixth member of the BRICS Development Bank. Tsipras said Greece is interested in the offer, and promised to thoroughly examine it. He will have a chance to discuss the invitation with the other BRICS leaders during the 2015 International Economic Forum in St. Petersburg,” the statement said.

During the 6th BRICS summit in Fortaleza in June 2014 the members agreed to forge ahead with the $100 billion NDB, as well as a reserve currency pool worth over another $100 billion. In March this year, Russian President Vladimir Putin ratified the NDB.

The new bank is expected to challenge the two major Western-led institutions, the World Bank and the International Monetary Fund. It will finance infrastructure projects in the BRICS countries and across other developing countries and is expected to start functioning by the end of 2015, with the headquarters in Shanghai.

Strengthening ties

Russia and Greece have been strengthening economic cooperation, as both countries have their own issues. While Russia is stuck in a so-called ‘sanctions war’ with the EU and the US, Greece is struggling to repay its multibillion euro debt to the troika of international lenders – the IMF, the ECB and the European Commission.

Greece is trying to find a compromise with its international creditors to have a further €7.2 billion bailout unlocked. So far Athens has been settling its IMF repayments on time. The country started repaying €750 million in debt interest Monday, but Finance Minister Yanis Varoufakis warned Greece’s finances are “a terribly urgent issue,” and the country could default by next month if no proper measures are taken.

Greece’s government has agreed a number of strategic deals with Russia during Prime Minister Alexis Tsipras’ visit to Moscow in April, including participation in the Turkish Stream project that’ll deliver Russian gas to Europe via Greece.

It was rumored Russia was ready to help Athens, but President Putin said Greece hasn’t formally asked Moscow for help. Instead of direct financial assistance Russia could help out by buying Greek state assets in privatization sales, or in other investment projects, the President said in April.

President Poroshenko’s government is far more corrupt and less efficient than the previous one, according to Martin Sieff, columnist for the Baltimore Post-Examiner. It’s like a black hole, the more money you pour in the less you will have, he added.

The International Monetary Fund (IMF) is to decide Wednesday whether to give a $17.5 billion bailout package to Ukraine. The Ukrainian parliament has already passed a series of austerity reforms to cut pensions and increase taxes in order to meet the creditors’ conditions, but more changes are going to be needed to gain this financial aid.

RT:About $4.6 billion in credit was extended to Ukraine in 2014, but its economic performance has scarcely improved. Does that mean the aid had no effect?

Martin Sieff: Pretty much yes, it does. It had the effect on keeping Ukraine afloat in the short-term. But this is an unconstitutional government in Ukraine which was really established by a violent coup in Kiev last year which has waged an aggressive war of repression against two secessionist provinces of its own country, which doesn’t have any real social contract with its own people. Its efforts to conscript large numbers of forces for the regular army have been met with peaceful but very clear resistance. This is a very weak disorganized government, it’s a black hole. The more money you pour in, the less effect you will have. You can keep it stable for a year or two but no longer than that.

RT:The IMF has agreed on a new $17.5 billion lifeline to Ukraine. Do you think that will be enough to stabilize the country’s economy even if fully implemented?

MS: The aid went at least in theory to what it was supposed to, but no doubt there was a great deal of corruption. It’s ironic that the government of President Yanukovich was accused of corruption and incompetence. This government is far more corrupt than the previous government was and it’s infinitely more incompetent. So simply money leaches away, but the real problem is the lack of credibility of governance. This government is even purging its civil service of anyone remotely accused or suspected of being efficient and loyal to President Yanukovich and his predecessors. You cannot have an efficient and credible government under these circumstances.

RT:The IMF is requesting a package of economic and political reforms to be carried out when providing financial assistance to any country. Are we seeing it carried out in Ukraine at least judging by its economic performance?

MS: No, no way. First of all, there is still unrest and violence in the two eastern provinces and spreading into other parts of the country. The security conflict and the conflict with Russia have to be settled first by this government. And they are not yet ready to settle it on terms that would be acceptable and reassuring to Moscow, but that has to be resolved first. Secondly, we saw even last year President Yanukovich broke off his negotiations with the EU, but he recognized that the terms under which the EU was ready to grant association to Ukraine would be disastrous and ruinous for the Ukrainian economy and the Ukrainian people. A year ago, the EU didn’t have the resources by itself to lift up even a peaceful Ukraine under democratically elected governance. The prospects of doing that now under President Poroshenko and his war-government, his war junta are very much less. So this would be $17 billion down the drain. You know they are all saying from Washington DC, I’m paraphrasing a little “$17 billion here, $17 billion there and soon you are talking about real money”.

RT:When signing the IMF program Ukraine makes certain financial obligations, do you think they could be committed at all in the current state of its economy or is it going to be a black hole of international aid?

MS: There is no question about that. This is very unwise economic policy that has a political motivation. The EU itself and the US government both plunged in recklessly to topple the Yanukovich government last year and to support President Poroshenko. And now we have the dominant mythology, the dominant narrative in Washington, and in Brussels, and in London is that this is “a stable democratic government which is being under threat from evil totalitarian forces to the East.” That is not the truth even remotely, but that is almost universally believed by policymakers in London and Washington and many of them in Brussels and therefore there is a political motivation to try and prop up Ukraine. But you can’t fix what’s already broken. You are pouring good money after bad. Ukraine’s problems first of all have to be solved in the security sphere then they have to be solved in the political sphere restoring the political amity and credibility and the incompetent but nevertheless stable civil service that existed until February 2014 a year ago. It was the EU and the US that broke Ukraine and they cannot fix it now by simply pouring money into a black hole.

Ukraine has agreed to increase the cost of gas to consumer by 280 percent, and 66 percent for heating, as part of the IMF terms for getting extra financial aid, says Valery Gontareva the head of the National Bank of Ukraine.

“From now on, in accordance with our joint program with the IMF, the tariffs will see rather a sharp increase of 280 percent for gas and about 66 percent for heat,” said Gontareva Wednesday during the 11th Dragon Capital investment conference in Kiev. She added that as a result inflation will be 25-26 percent by the end of 2015.

The tariff rises are part of the amendments to the 2015 budget the government has had to introduce in order to receive an $8.5 billion loan from the IMF by the end of the year.

The changes will also see Ukraine’s budget deficit growing to 4.1 percent of GDP and forecasts a 5.5 percent decline in the Ukrainian economy.

Prime Minister Arseny Yatsenyuk had warned of future price rises for gas and heating, and stressed the IMF saved Ukraine from default, and now it’s time to make moves which should eventually result in Ukraine’s complete independence from Russian gas.

The tariff increase was among the subjects Ukraine and the IMF touched upon during negotiations in January. Deputy Chairman of the Ukraine parliament’s budget committee Viktor Krivenko said the IMF had requested a sevenfold increase in prices.

The head of IMF Christine Lagarde said on February 12 that the preliminary agreement reached between Kiev and Western creditors envisages increasing the aid package to $40 billion over the next four years.

The program will help Ukraine receive an additional $25 billion in financial aid, of which $17.5 billion will be provided to stabilize the financial situation in the country.

The latest IMF program will replace the $17 billion package agreed in April 2014. Ukraine has already received $4.5 billion under that agreement, thus the total IMF loans to Ukraine since the beginning of the crisis amount to $22 billion.

The International Monetary Fund announced a new $17.5 billion lifeline for Ukraine, which would bring the total bailout package to $40 billion. The new sum would be a four-year program.

Lagarde will propose the $17.5 billion expansion program to the IMF by the end of the month.

“The program is not yet approved by the governing council. I hope to offer it for approval by the end of February,” she said Thursday.

“This new four-year arrangement would support immediate economic stabilization in Ukraine as well as a set of bold policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people,” Lagarde said in a statement.

In return Ukraine will have to present a “program of deep economic reforms,” which includes the whole economy and a plan to transform Naftogaz, Ukraine’s state oil and gas company.

“It’s a large program, it’s a longer-term program than the previous one, which was a traditional SBA [Stand-By Arrangement] for two years,” the IMF chief said.

“It’s ambitious, it’s not without risk, but we believe it is a realistic set of macroeconomic framework, ambitious reforms, but reforms the authorities feel confident they can deliver,” Lagarde said.

IMF head Christine Lagarde didn’t answer the question as to whether the four-year international bailout program for Ukraine included credits from Russia.

“The sum includes funds from the IMF and the EU, and also bilateral and multilateral loans.”

Earlier this month, the US promised Ukraine as much as $2 billion in loan guarantees, while the EU said it would disburse €1.8 billion ($2.1 billion).

Boon to Ukraine’s economy

Ukraine’s Prime Minister Arseny Yatsenyuk stressed that the new bailout program would open sources for Ukraine to get help from other international organizations and partners, making the total sum thus $25 billion.

He confirmed the commitment to reforms that will stabilize Ukraine’s economy and finance. The country’s game plan includes fighting corruption, settling the energy sector, as well as cutting and optimizing state expenditure and increasing investment to 3 percent of the GDP, Yatsenyuk explained.

“Stabilization of the banking system and the exchange rate are also the goals of the program,” Yatsenyuk said.

“Recovery in confidence in Ukraine through the adoption of the 4–year program will be a major factor in the stabilization of the exchange rate, and an objective and strong banking system of Ukraine that will give the opportunity for Ukraine’s economy to develop,” he added.

Yatsenyuk said the government is also going to provide extensive assistance to low-income households. By the end of the year he expects it to include income indexation linked to the level of price rises. He also said the IMF program will provide $500 million for low-income families to help pay for increased energy bills.

Despite, or because of, the fallout from the 2007 Great Recession, annual earnings between the richest Americans and everybody else have exploded to record levels. Meanwhile middle- and lower-class wealth growth remains stagnant.

The median wealth for high-income families hit $639,400 last year, a whopping 7 percent jump from three years earlier and seven times greater than middle-class incomes, which stood at $96,500 according to Pew Research Center, citing data from the Federal Reserve.

Middle-class median wealth, which Pew defines as the difference between the value of a household’s total assets and debts, has not advanced since 2010.

The financial chasm now separating the rich and everybody else is the widest since the Fed began tracking earnings 30 years ago, which became even more pronounced following the 2008 global financial crisis.

“The latest data reinforces the larger story of America’s middle-class household wealth stagnation over the past three decades,” Pew said. “The Great Recession destroyed a significant amount of middle-income and lower-income families’ wealth, and the economic ‘recovery’ has yet to be felt for them.”

Pew defines middle-income households – a broad grouping – as those earning between two-thirds of and double the median income, after adjusting for the number of family members living under one roof.

For example, a single individual living alone was ranked as middle income if his/her earnings last year were between $22,000 and $66,000. For a family of four to qualify as middle-income, earnings would have to be between $44,000 and $132,000.

According to this standard, 46 percent of US households last year fell into the middle-income category, while about 33 percent were considered lower income, and 21 percent high income.

Perhaps the most shocking bit of information skimmed from the data is the poor performance of the American middle- and lower-class wealth accumulation over the last 30 years.

For middle-income families, Pew reported “practically no change in wealth over the 30-year period.” The median wealth for the middle class was $94,300 in 1983. That peaked at $158,400 in 2007 and has since fallen back to $96,500.

At the same time, the wealth of lower-income families jumped to a high of $19,100 in 2001, but has since plummeted to $9,300 last year. Median wealth for this group stood at just $11,400 in 1983.

It should perhaps come as no surprise that the wealthiest US families showed the smallest percentage drop of wealth from the outbreak of the 2007 crisis to 2010.

Due in large part to their “disproportionately large stock holdings,” the upper-income class recovered a “substantial part” of losses sustained during the crisis – primarily due to government bailout packages that injected trillions of dollars into the market to shore up the financial system – while lower-income families saw no recovery.

Over the longer period, the average wealth of upper-income families recorded last year was about double what it was in 1983, when it stood at $318,100 to $639,400 in 2013, it reported.

Pew ventured to speculate that the wide wealth disparity between the classes “could help explain why…the majority of Americans are not feeling the impact of the economic recovery, despite an improvement in the unemployment rate, stock market and housing prices.”

In October, just 20 percent of Americans rated the country’s economic conditions as ‘excellent’ or ‘good’, the polling agency said, an increase from the 8 percent who said that four years ago, but far from an optimistic outlook.

Natives of the US, Georgia and Lithuania were hastily granted Ukrainian citizenship in order to become key ministers in the new government of Ukraine, which was approved by the country’s parliament on Tuesday.

President Poroshenko has also announced he will sign a decree to grant citizenship to foreigners fighting on Kiev’s side in the east of the country.

Natalie Jaresko of the US, who currently heads the Kiev-based Horizon Capital investment fund, will take reigns at the Ukrainian Finance Ministry.

In 1992-1995, Jaresko served as the first Chief of the Economic Section of the US Embassy in Ukraine.

Before that she occupied several economic positions in the US State Department, according to Horizon Capital’s website.

The position of health minister went to Aleksandr Kvitashvili, who occupied a similar post in the Georgian government in 2009-2012.

“Ukraine spends 8 per cent of its GDP on healthcare, but half of this money is being plundered. Aleksandr Kvitashvili must implement radical reforms as he has no ties with the Ukrainian pharmaceutical mafia,” Ukrainian PM, Arseny Yatsenuk, said as he presented the new minister to the deputies.

Alexander Kvitashvili, a candidate for head of the Ukrainian health ministry, at a session of Verkhovna Rada in Kiev (RIA Novosti / Mikhail Polinchak)

Lithuanian Aivaras Abromavicius has been approved as the economy minister by the new parliament, the Verkhovna Rada.

Abromavicius, who is a partner at the $3.6 billion-worth East Capital asset management group, conducts his operations from Kiev after marrying a Ukrainian.

“There’s hard work ahead of us because Ukraine is a very poor and corrupt country and we’ll have to use radical measures,” he told MPs from the Rada Tribune.

288 out of 450 deputies supported the cabinet proposed by Ukrainian president Petro Poroshenko, with the new ministers sworn in right after the vote.

“I congratulate the Ukrainians with the formation of the pro-European government,” Poroshenko wrote on his Twitter page.

He told the Rada that he views the foreigners as some kind of anti-crisis management need due to the difficult situation in economy, the fighting in Donbas, the necessity of radical reforms and large-scale corruption.

Earlier on the Tuesday, the president has signed special a decree granting Ukrainian citizenship to Jaresko, Kvitashvili and Abromavicius.

Aivars Abramovicus (Aivaras Abromavicius), a candidate for head of the Ukrainian economy ministry, at a session of Verkhovna Rada in Kiev (RIA Novosti / Mikhail Polinchak)

Dual nationality is forbidden in Ukraine and the trio has already written applications to give up the citizenship of foreign states, Yury Lutsenko, the head of the Petro Poroshenko Block (PPB), said.

Poroshenko said that there’ll be even more foreigners on administrative positions in Ukraine as the country “must attract the best international experience, which includes assigning positions in the government to representative of states friendly to Ukraine.”

Also on Tuesday, the MPs from Poroshenko’s ruling bloc have registered a draft law in the Rada on amending the Ukrainian legislation for it to allow citizens of other states in the government.

It had been announced by Poroshenko a week ago. This move has been dubbed “unprecedented” and attracted criticism from experts with some calling it “allegiance to the so-called European choice,” and others expressing concern that it can be a sign of Ukraine losing its sovereignty.

Poroshenko also promised to grant the citizenship of Ukraine to all foreigners fighting for Kiev against the militias in the country’s eastern Donetsk and Lugansk regions.

“I’m going to sign a decree conferring Ukrainian citizenship to those, who defended Ukraine with arms in their hands,” he wrote on Twitter.

However, not everybody in the parliament supported the inclusion of foreigners into the Ukrainian government.

Earlier, the MP from the Opposition Block said Aleksandr Vilkul suggested that by inviting people from abroad the Ukrainian authorities are trying to absolve themselves of responsibility for the state of things in the country.

Vilkul colleague, Yury Boyko, said he can’t understand how it wasn’t possible to find 10 candidates for the cabinet among Ukraine’s 40-million population.

Sigurjon Arnason, the ex- CEO of Landsbanki, one of the three Icelandic banks that crashed and ruined the economy in 2008, has been sentenced to 12 month in prison for manipulating the bank’s share price and deceiving investors in the bank’s dying days.

A court of Reykjavik found Arnason guilty, but nine months of his term will be suspended and served on probation.

Glitnir, Kaupthing and Landsbanki – the three largest Icelandic banks – spectacularly crashed in the autumn of 2008 after gaining assets equivalent to 10 times the size of Iceland’s economy as they funded operations by local businessmen abroad. The former chief executives of the other major banks have already received jail sentences.

Ivar Gudjonsson, Landsbanki’s former director of proprietary trading, and Julius Heidarsson, a former broker, were sentenced to 9 months of which 6 months will be suspended. They were accused of manipulating the bank’s share price by lending funds to investors provided they buy shares.

All the accused pleaded not guilty.

“This sentence is a big surprise to me as I did nothing wrong,” Sigurjon Arnason told Reuters after the hearing. His attorney said he would appeal the verdict, according to Icelandic media.

Unlike other western countries Iceland is actively targeting the former top management of its banks as it investigates alleged financial crimes committed in the lead up to the crisis of 2008.

Russia intends to have its own international inter-bank system up and running by May 2015. The Central Bank of Russia says it needs to speed up preparations for its version of SWIFT in case of possible ”challenges” from the West.

“Given the challenges, Bank of Russia is creating its own system for transmitting financial messaging… It’s time to hurry up, so in the next few months we will have certain work done. The entire project for transmitting financial messages will be completed in May 2015,” said Ramilya Kanafina, deputy head of the national payment system department at the Central Bank of Russia (CBR).

Calls not to use the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system in Russian banks began to grow as relations between Russia and the West deteriorated over sanctions. So far, SWIFT says despite pressure from some Western countries to join the anti-Russian sanctions, it has no intention of doing so.

Ramilya Kanafina says the system will meet all the market requirements due to its security. A center for processing messages in SWIFT format is in the process of development. It is expected that all messaging options will be operating by December 2014, she added.

The National Payments Council, a non-profit partnership comprising members of the Russian national payment system, proposed establishing a Russian version of SWIFT 100 percent owned by Bank of Russia in September.

SWIFT, is currently one of Russia’s main connections to the international banking system, and if turned off, could hurt the Russian economy, in the short-term. Globally it transmits orders for transactions worth more than $6 trillion, and involves more than 10,000 financial institutions in 210 countries. According to SWIFT’s statute, the system has national groups of members and users in each country. In Russia it’s ROSSWIFT – the second biggest worldwide SWIFT association after the US.

A record level of $158.8 trillion in global debt, together with low economic growth is creating a serious threat of a new financial crisis, says the sixteenth annual Geneva Report.

Total world debt, excluding the financial sector, has risen from 180 percent of global output in 2008 to 212 percent last year, according to the report written by a panel of senior economists including three former senior central bankers.

“Contrary to widely held beliefs, the world has not yet begun to deliver, and the global debt to GDP ratio is still growing, breaking new highs,” the report said.

The World Bank data showed that in 2013 global GDP was $74.909 trillion.

source: Geneva Reports on the World Economy

At a world level, there was acceleration in real growth from the mid-1990s until the mid-2000s, largely driven by the impressive performance of emerging markets over this period.

However, output growth in advanced economies has been declining for decades, which accelerated after the crisis. The developed economies enjoyed only a temporary improvement in real output growth in the late 1990s which had already started gradually eroding by the mid-2000s.

A “poisonous combination of high and rising global debt and slowing gross domestic product, driven by both slowing real growth and falling inflation,” may cause a crisis, warns the report.

Despite the modest decrease in household debt in the UK and the rest of Europe, the credit binge in Asia has offset the improvements, pushing the global private and public debt to a new high in 2013.

Until 2008, the leveraging up was being led by developed markets, but since then emerging economies led by China have been the driving force in the process, thus becoming the most vulnerable to the next crisis.

“Although the level of leverage is higher in developed markets, the speed of the recent leverage process in emerging economies, and especially in Asia, is indeed an increasing concern,” says the report.

Forget Visa and MasterCard. After the two American credit system payment companies froze accounts without notice in March, Russia has been looking for an alternative in China UnionPay.

China UnionPay plans to have 2 million cards in Russia in the next three years.

Instead of seeing the small Visa and MasterCard logo on credits cards, ATMs, and retail outlets, Russians will start to see the three words “China. Union. Pay.”

China UnionPay first emerged in 2002 on the domestic Chinese market as an alternative to Visa and MasterCard, but quickly expanded internationally, and now is already number one in terms of quantity of cards in the world.

“VTB24 already serves China UnionPay cards in its ATM network and now the bank is in negotiations with this payment system to start acquiring retail merchants,” VTB24’s press office said in a statement.

Most banks just began their relationship with China by offering clients corresponding services- none of the bankers imagined that they would be issuing Chinese credit cards.

In March, both Visa and MasterCard blocked the accounts of cardholders at BankRossiya and SMF Bank, both which were sanctioned by the US over Russia’s involvement in Crimea.

Russian financiers who used to keep their assets in dollars and euros were shocked by the event, and moved their capital back to Russia out of fear one day all their assets would be blocked by politicians in Washington DC.

“Visa and MasterCard have 100 percent trust, but right now, there is no trust in the system, and many, even our clients, have shifted their transactions from American dollar and Euro to Yuan. They are eager to receive this card- we already have a big list of people waiting to get this card instead of MasterCard and Visa,” Denis Fonov, Deputy Chairman at LightBank, a small Moscow-based bank, told RT.

LightBank was working with UnionPay long before it knew the cards would be coming to the Russian market – and ordered 10,000 cards pre-emptively as a side service for clients.

As a result of the freeze, Visa and MasterCard will now have to pay a security deposit to Russia’s Central Bank, which is estimated to be billions for each company. Similarly, once UnionPay begins operating in Russia, it will also put down a security deposit with Russia’s Central Bank, about $3-4 billion, Fonov said.

$5.3 trillion in payments

There are already 20,000 cards in circulation in Russia, and a second order of 100,000 cards is planned for September. In Russia many banks accept UnionPay cards, but not merchants, that’s the next step.

By the beginning of 2014, the payment system had already issued 4.2 billion cards, mostly in China.

In terms of total world trade turnover, China UnionPay is the leader in debt cards, with over $5.3 trillion in payments, or about 47 percent of the market share, whereas Visa has 40.6 percent, and MasterCard only 12.2 percent, according to the Nilson Report.

In overall transactions, Visa is still the leader with $4.6 trillion, and China UnionPay comes in second with $2.5 trillion in transactions in the first half of last year.

UnionPay already successfully operates in Australia and Canada, with their deposits tied to both the local currency and the yuan. In total, UnionPay operates in 142 countries.

China’s UnionPay will be a temporary solution for Russia to detach from the West while it prepares to launch its own payment system, which officially isn’t slated to begin operating for another 16 months, and according to sources in the industry, it could even be 2-3 years out.

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By Joshua Blakeney | Press TV | August 31, 2013

In a recent tweet Stephen Walt, professor of International Relations at Harvard and co-author of the seminal text The Israel Lobby and US Foreign Policy wrote, “Note to advocates of military action in Syria: please tell us ur endgame: where does using force lead and who’s in charge if Assad goes?”

I would answer, that from the perspective of the Israeli-guided Western imperialists the answer would be: nobody. Israel and its de facto puppet regimes in Ottawa, London, Paris and Washington want Syria to be a dysfunctional, ungovernable failed state, rather than a sovereign Arab state led by an intelligent, anti-Zionist strongman.

It ought to be kept in mind that the post-WWII US military doctrine for the Middle East was the Eisenhower Doctrine which promoted the fomentation of stability in the region to facilitate the flow of oil to Americans. This was fine if you were safely ensconced in Houston or Dallas with your oil companies raking in profits from Middle East oil fields but for Israel this policy was disastrous. The funneling of petro-dollars to Israel’s adversaries like Saddam Hussein, who fired scud missiles at Israel in 1991, and to the likes of President Assad was intolerable. Therefore a schism in the Empire soon emerged and two distinct US-Zionist visions for the Middle East crystallized. … continue

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This article will examine some of the connections between the US and UK National Security apparatus and the appearance of the anthropogenic global warming (AGW) theory beginning after the accident at Three Mile Island. … continue

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